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Biotest: Impairment of US business and investments in Europe

Dreieich, 20 October 2015. Biotest AG announces impairments today totalling to EUR 84 million, leading to a negative third-quarter result (Q1-Q3 2015 EBIT: EUR -82 million). The impairment primarily relates to the company's US therapy activities. The US plasma collection business remains unaffected. The expansion of the production at its headquarters in Dreieich, with a capital expenditure of EUR250 million until 2019 and the operating activities outside the US market are unaffected by these measures. With the capacity expansion project "Biotest Next Level" ("BNL") the company is not only doubling its production capacity but at the same time reducing its costs per product unit. In future Biotest aims to obtain five products instead of currently three products from one liter of blood plasma.

Decline in sales of a US product triggers impairment of US production facility

The impairment of the US business is due to significant decline in sales of the product BIVIGAM^(R) over the past two months, after an above plan performance during the first half of 2015. BIVIGAM^(R) is a polyvalent immunoglobulin, produced by the subsidiary Biotest Pharmaceuticals Corporation, Boca Raton, Florida, US, which is manufactured and marketed exclusively in the US. Due to the weak sales, an impairment had to be recognised on inventories of the product with a shorter remaining shelf life (EUR14 million). In this context the US-production facilities, parts of the buildings as well as intangible assets are written off (EUR55 million).

The market perspectives for Civacir, a product which is currently being developed in Hepatitis C, have deteriorated significantly. A re-evaluation of the project leads to an impairment of intangible assets and inventories in the amount of EUR 13 million. The drug is designed to prevent re-infection with the Hepatitis C virus after liver transplantation. Despite the fact that the interim findings of the Civacir phase III study are promising and the study goals have been met so far, Biotest expects only reduced market potential due to the newly available highly potent antiviral drugs which are now also investigated early after liver transplantation.

Executive Management Board expects significant increase in earnings

Despite the unscheduled impairment, the company's operating cash flow will remain positive for the year 2015, the equity ratio as of September 30, 2015 is at 42 percent and financing is available for all development projects. Biotest expects a significantly improved result for the 4th quarter of 2015. After generating an EBIT of EUR2.4 million during the first half of 2015, the Executive Management Board is expecting an EBIT between EUR5 and EUR10 million for the 4th quarter of the year.

Strategic realignment

As consequence, Biotest is, at the moment, refining its strategy. It will focus on the Plasma business and the plant expansion (BNL) is a vital part of this strategy. BNL targets a broadening of the production portfolio, doubling of the capacity and in total a significant increase of the profitability. Moreover, Biotest is pursuing selected alliances on specific activities in certain areas of the business.

With regard to the antibody portfolio, the company will continue the ongoing pre-clinical and clinical activities aiming to find suitable partners for further development and commercialization.

Disclaimer

This document contains forward-looking statements on overall economic development as well as on the business, earnings, financial and assets position of Biotest AG and its subsidiaries. These statements are based on current plans, estimates, forecasts and expectations of the company and are thus subject to risks and elements of uncertainty that could result in significant deviation of actual developments from expected developments. The forward-looking statements are only valid at the time of publication. Biotest does not intend to update the forward-looking statements and assumes no obligation to do so.

About Biotest

Biotest is a provider of plasma proteins and biological drugs. With a value added chain that extends from pre-clinical and clinical development to worldwide sales, Biotest has specialised primarily in the areas of clinical immunology, haematology and intensive medicine. Biotest develops and markets immunoglobulins, coagulation factors and albumins based on human blood plasma. These are used for diseases of the immune and haematopoietic systems. In addition Biotest develops monoclonal antibodies in the indications of cancer of plasma cells and systemic lupus erythematosus which are produced by recombinant technologies. Biotest has more than 2,200 employees worldwide. The preference shares of Biotest AG are listed in the SDAX on the Frankfurt stock exchange.

Biotest AG, Landsteinerstr. 5, 63303 Dreieich, www.biotest.de
Dr. Monika Buttkereit
tel.: +49 (0) 6103 801-4406,
email: investor_relations@biotest.de

Securities' ID No., ISIN ordinary shares: 522720, DE0005227201
Securities' ID No., ISIN preference shares: 522723, DE0005227235
Listing: Prime Standard
Open Market: Berlin-Bremen, Düsseldorf, Frankfurt, Hamburg, Hannover, München, Stuttgart